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What is a Bond Coupon?

DeFine Glossary #7

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Defined: Bond Coupon

Coupons refer to any interest earned as money from a Bond.


If you've loaned money to a company, they usually fix an interest rate & pay it back to you annually.

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Example: Give Rs 100 to Company X for 1 year at 5% interest rate.


Bond's face value=Rs 100.


Coupon=Rs 5.

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Simply Put,


Coupon refers to the interest you earn on a bond as a percentage of the bond's face value

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